David Cameron's flagship "big society" project is at risk of being derailed by savage cuts to grassroots voluntary groups and a collapse in trust among the very people the government expected to deliver its vision, according to an independent audit of the first two years of the initiative.

The report concludes that the big society lacks a clear vision and strategy and is in danger of becoming "an initiative for the leafy suburbs", despite the prime minister's championing of a policy he described at its Downing street launch in 2010 as something he hoped would be "one of the great legacies" of his government.

It says grassroots community groups expected to deliver the big society have been dealt a "body blow" by the first tranche of expected £3.3bn cuts in government funding to the voluntary sector over the next three years, while a support programme, introduced by ministers for charities at risk of going bust, was "too little, too late".

As a result of the cuts and the government's failure to communicate or deliver its big society aspirations, much of the goodwill civil society groups initially felt towards the project has now evaporated, says the report, published by the thinktank Civil Exchange.

The report's author, Caroline Slocock, said it was too early to pass judgment on Cameron's vision, which tapped into a "genuine seam of public interest". But she said: "There are real question marks over the vision and delivery of big society."

The report draws on more than 40 data sources to test progress on the government's "three pillars" of the big society: enabling people to shape their local area, opening up public services provision to charities, and levels of "social action" such as volunteering. It finds:

• There is a widening "big society gap" in which volunteering and other forms of social capital are strongest in wealthy areas. Cuts have hit charities based in deprived areas the hardest, creating the danger that the project becomes "an initiative for the leafy suburbs".

• Despite ministerial promises, charities and social enterprises have been sidelined in the market for government contracts, such as the Work Programme, which the report says has "an implicit bias towards large, private sector businesses".

• The government lacks a common vision and strategy for the big society, while smaller voluntary groups vital to delivering the project have found it hard to make their voices heard in Whitehall. It cites figures showing 70% of charity leaders believed the government did not value or respect the voluntary sector as a partner.

The sense that big society policy is foundering is underlined by a separate Guardian survey of the 16 specially invited guests present at the big society launch meeting held in Downing Street in May 2010, hosted by Cameron and the deputy prime minister, Nick Clegg.

Most of those invited were the kind of grassroots community activists and social entrepreneurs identified by the government as central to its project.

The survey reveals that while most of the participants still subscribe to big society aims in principle, many key supporters have become disheartened by the scale of cuts to charities and the failure of the government to put its weight behind the policy, which sought to give local people and charities a bigger say in running their communities and services.

One guest, Rob Owen, chief executive of the offender rehabilitation charity St Giles Trust, said large-scale cuts to voluntary sector funding had hampered the delivery of the big society. He said: "It's difficult to be radical or a revolutionary when there's no ammunition in the rifles, or very little."

The meeting was held just two weeks into the coalition administration on 18 May 2010. Hosted by Cameron and the deputy prime minister, Nick Clegg, in the cabinet room at No 10, the staging and timing of the event was meant to symbolise the importance the coalition placed on the big society.

But Dick Atkinson, chief executive of Balsall Health Forum, a grassroots community group in Birmingham, which was credited by the education secretary Michael Gove as the "inspiration" behind the big society manifesto, told the Guardian much of the optimism he had detected at that cabinet room meeting had been swept away by funding cuts.

He said: "The big society idea was good but I'm not convinced that the government has been able to turn its words into good deeds... nothing like as much progress has been made [as I had hoped]."

Social entrepreneur Paul Twivy, at the time chief executive of the Big Society Network, said he had believed in the big society ideology, but had been dismayed by the "devastating" cuts to the voluntary sector, which threatened to do long-term damage to civil society.

He said: "At some point we are going to have to say it [big society] is not a principle unless it costs money… There's no doubting the sincerity of David Cameron towards big society. But he has to enact it."

The civil society minister, Nick Hurd, defended the government's big society record, and attacked "cynics who continue to carp". He argued that over the past two years, the government had "done a huge amount to create the conditions for people in their local communities to drive the change they want to see".

But Lord Adebowale, chief executive of the social enterprise Turning Point, who attended the Number 10 launch, said the idea had become marginalised: "It's hard to put my finger on anything that's happened as a result of big society. I'm an optimist but I suspect big society has lost momentum and purchase. Big society exists, but in the frozen wastes of Siberia."